Perkins & Marie Callender’s files for bankruptcy

The parent of the Perkins and Marie Callender’s family restaurant chains has filed for Chapter 11 bankruptcy protection in anticipation of selling the dual brands’ assets.

Perkins & Marie Callender’s also intends to close additional units, the court documents indicate. It recently shuttered 32 stores, according to media reports.

The company, which owns or holds the franchise rights to 400 restaurants, has agreed to sell Perkins to a stalking horse company, Perkins Groups, for an amount not disclosed in the court documents. The papers indicate that negotiations are underway to sell parts of Marie Callender’s and a portion of the company’s manufacturing holdings to other parties. Callender’s is the smaller of the two restaurant brands, with only about 51 stores in operation domestically, according to research firm Technomic.

The filings indicate that the company owes lenders about $100 million, with total liabilities of $100 million to $500 million. The value of its current assets are valued in the papers as $50 million to $100 million.

The bankruptcy filing is the company’s second in eight years. It emerged from court protection in 2011, filing as a holding of an investment group led by Wayzata Investment Partners. Wayzata still controls about 73% of the company.

The family restaurant market has polarized in recent years. Big heritage brands such as IHOP and Denny’s have split the segment’s growth with emerging regional brands such as Black Bear Diner and breakfast-and-lunch-only concepts such as Snooze, an A.M. Eatery and First Watch. But intense competition, particularly from quick-service brands offering all-day and extensive breakfast menus, has hurt a number of other onetime dominant players.

A Perkins franchisee, 5171 Campbells Land Co. (CLC), filed for bankruptcy protection on July 8 after the franchisor won a court go-ahead to take back the operation's 26 stores.